The State of the Safety Net in the Post-Welfare Reform Era, By Marianne Bitler, UC Irvine and San Francisco Federal Reserve Bank, Hilary W. Hoynes, UC Davis, September 8, 2010. Paper prepared for Brookings Papers on Economic Activity, Conference Date September 16-17, 2010
“The passage of the 1996 welfare reform bill led to sweeping changes to the central U.S. cash safety net program for families with children. Importantly, along with other changes, the reform imposed lifetime time limits for receipt of welfare de facto ending the entitlement nature of cash welfare for poor families with children in the United States. Despite dire predictions about poverty and deprivation, the research shows that caseloads declined and employment increased, with no detectible increase in poverty or reduction in child-wellbeing. We re-evaluate these results in light of the severe recession which began in December 2007. In particular, we examine how the cyclicality of the response of program caseloads and family well-being has been altered by the implementation of welfare reform. We find that poverty and non-cash safety net program participation have become significantly more responsive across economic cycles after welfare reform. We find no significant effects for the impact of reform on the cyclical responsiveness of food consumption, food insecurity, health insurance, household crowding, or health.”
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